Sailing on the sea depends on the helmsman. Where will FONE take the ship of financial digitalization?

Entering the digital age, digital survival ability has become one of the necessary capabilities for enterprises to face the future. In the process of building digital capabilities, enterprise digital transformation is obviously a must. When it comes to digitalization, enterprises often have different levels of cognition, especially how the business can adapt to the development needs of the digital age, which has become a common problem faced by enterprises. As digital systems move from process transformation to business transformation, more and more companies are beginning to promote industry-finance integration. Industry-finance integration plays an important role in connecting business and finance, closely combining the two and providing strong support for business decisions.

To what extent have the business and finance integration of various enterprises reached today? How does business and finance integration help corporate operations?

Recently, iResearch, a domestic third-party data research organization, officially released the "2021 China EPM "Business and Finance Integration" Industry Research Report". The report clearly pointed out the pain points of performance management of Chinese companies, closely integrated EPM business and finance integration with actual business scenarios, and analyzed in detail the representative manufacturers in the field of domestic EPM business and finance integration, providing a practical guide to financial digitalization for industries and companies.

Breaking down stovepipe data systems and focusing on refined corporate financial management

Enterprise digitalization is a process that is easier said than done. Although different enterprises have different understandings of digitalization, they all have the same goal, which is to systematically and thoroughly redefine the business through digital means - not just IT, but all aspects of organizational activities, processes, business models and employee capabilities, so that enterprises can achieve sustainable development. At present, the linkage effect between finance and business has become one of the important factors restricting enterprises.

At present, the traditional enterprise informatization construction has completed its first phase of mission, presenting enterprise business information in a digital way, but it has brought an indisputable fact - a large number of "towering chimney-style" information systems have formed multiple data islands, and it is difficult for data between systems to be interconnected, and it is difficult to achieve two-way verification and drill-down analysis of financial data and business data, which also restricts the timeliness of data analysis. In this regard, the report pointed out that in order to solve the problems arising in the accounting and management process, enterprises deploy IT systems according to vertical business logic, but it is difficult for enterprises to make unified plans and realize comprehensive deployment when establishing financial systems. Most systems are purchased and constructed independently, and are deeply integrated with processes and underlying systems, resulting in data islands.

In addition, with the development of the enterprise and the iteration of business, the architecture of some old EPM systems can no longer meet the needs of enterprise development in terms of product scalability and big data analysis capabilities.

In the past, finance could only get business data after the fact, which caused a certain lag in the company's management and decision-making. After the company grows to a certain scale, it needs to reversely plan and adjust business behavior through the linkage of financial and business data. In this case, the value of "EPM business and finance integration" gradually emerges. It was born to solve the above problems and is a natural product of the increasingly refined management of modern companies and the increasing amount of corporate data. Unlike simple transactional work such as bookkeeping and accounting, EPM business and finance integration goes deep into every link of sales, production, finance, procurement, and operations. On a unified platform, based on the core business and financial data, it builds a multi-dimensional data model to conduct business financial planning, real-time analysis, rolling forecasts, and form management reports.

This process will greatly enhance the real-time analysis and forward-looking management capabilities of corporate financial management, and completely change the situation where traditional finance is in a "rearview mirror" position in the business process of enterprises. Taking comprehensive budgeting as an example, enterprises need to spend a month or so just to collect and organize various business and financial data through traditional financial software. In addition, due to the characteristics of comprehensive budgeting, it will be constantly adjusted during the preparation process, resulting in multiple versions. The efficiency of saving and comparing different versions is extremely low. Under the EPM business and financial integration framework, enterprises can achieve closed-loop management of budgeting goal formulation, preparation, execution, control, analysis, assessment, and application, emphasize the inherent business and financial logic relationship of indicators, build complete indicator linkage, ensure that the financial model complies with business rules, and maximize the accuracy and scientificity of the budget, so as to achieve managers' support for enterprise perspective and decision-making.

In this field, EPM business-finance integrated manufacturers such as FONE provide scenario-based solutions suitable for different industries with their accumulated experience in serving industry customers for many years. They extract the solutions and needs of industry customers into fixed and standardized templates. After building a business basic platform and a built-in general model, they can form a relatively complete business model based on the degree of matching between the model and customer needs, thereby realizing the rapid implementation of the scenario, which provides efficient management tools for the refined management of corporate finance.

Four major trends in EPM business-finance integration: lightweight, middle-platform, high reuse, and strong integration

In the early days of EPM development, many companies either directly purchased the underlying platforms of foreign giants for transformation, or chose open source technology architecture for secondary development to quickly lower the technical threshold of EPM. However, both technical routes have their limitations. The new generation of EPM has comprehensive special requirements in terms of large data volume and high concurrent user access, real-time computing, synchronous data reading, writing and complex logical calculations, and has very high requirements for underlying data processing capabilities. Neither traditional technical architectures nor existing open source technologies can meet these requirements at the same time. Using the underlying technology of foreign giants means that the core technology cannot be independently controllable, which means that the system's performance, scalability and product autonomy cannot be guaranteed.

The report points out that the EPM business-finance integration platform needs to be able to integrate heterogeneous data sources, process complex multi-dimensional analysis through high-performance engines and distributed architecture, ensure a computing experience with a response in seconds, and the application layer needs to be based on platform design and applicable to multiple application scenarios, and ultimately achieve multiple forms of result presentation. Based on this, EPM business-finance integration vendors need to have big data capabilities, the ability to quickly build business logic, high concurrency of big data, real-time reading and writing, and complex computing capabilities. In addition to having solid underlying technical capabilities, service consulting, customized development, after-sales service capabilities, and the integration of upstream and downstream vendors’ ecosystems are also important guarantees for determining the core competitiveness of EPM business-finance integration vendors.

Taking FONE, a representative domestic EPM business-finance integration manufacturer, as an example, FONE did not choose the traditional model of ordinary financial SaaS manufacturers that focus too much on upper-level applications, but adopted an integration model of underlying platform + upper-level applications. This model requires manufacturers to have solid IT technical skills and deep experience in the financial industry, which poses a considerable challenge to the capabilities of the manufacturers themselves.

FONE has chosen this path that few people have taken. It believes that the core technical barrier in the EPM field is high-performance platform capabilities. To this end, FONE continues to deepen its independent research and development technology capabilities, and builds a solid digital foundation based on M-OLAP (real-time online computing and analysis) engine technology, multi-dimensional modeling capabilities and distributed architecture to meet users' requirements for high-performance, high-concurrency, and real-time analysis and prediction capabilities of the system. This move also makes it the only company in China that has independent control over all core technologies from the underlying platform to the upper-level applications.

In the era of pursuing efficiency, more and more enterprises tend to choose one-stop solutions. A manufacturer should cover relatively complete business products as much as possible, so as to ensure the continuity of services and technology. In this regard, FONE has developed a relatively complete EPM product matrix and launched three new generation EPM software products, namely FONE Planning (comprehensive budget management), FONE Consolidation (consolidated statements), and FONE SPM (rebate/commission management). Enterprises can choose products that meet their respective business needs, which will help achieve business goals and integrate business and financial management.

For comprehensive budget management, the FONE Planning solution meets the needs of enterprises for real-time budget management, dynamic analysis, and compliance control, covering key nodes such as planning, budgeting, forecasting, and analysis, including eight comprehensive budget management links: budget modeling, historical data preparation, goal formation, budget preparation, budget consolidation, budget control, budget analysis, and budget assessment. FONE can simulate and deduce the results of sales, production, and financial business lines and different operating plans based on historical data, and automatically solve the optimal operating plan, plan annual goals based on predicted values ​​and adjusted values, and formulate more scientific and reasonable business goals.

FONE will also split the group's annual goals into subsidiaries, channel divisions, and product lines based on business logic, and verify the rationality of the goals of subordinate units based on preset logic, reduce the workload of manual review and balance, and improve budget preparation efficiency. When preparing a budget, FONE can make additions and subtractions based on the budget data of the previous version, and can customize the rolling period, such as monthly, quarterly, and other periodic rolling forecasts, so that companies can adjust their business strategies in a timely manner according to market changes to ensure the achievement of annual goals.

FONE brings not only process changes to enterprises, but also real improvements in efficiency. For example, after applying FONE's comprehensive budget product, Weiquan Group shortened the budget preparation cycle from 1-2 months to 1 week, increasing the speed by 4-8 times. After filling in the form, the calculation results are issued in real time, which greatly saves the time of financial personnel. At the same time, multi-dimensional data analysis provides data support for management decisions in real time.

In the management process of many companies today, although they have ambitious strategic goals, it is difficult to break them down into key operational indicators, resulting in the inability to effectively implement strategic goals. So how can we effectively convey the best operating practices of leading companies to corporate users so that they can learn from advanced management experience and quickly form their own operating methodology?

To this end, FONE officially launched FONE Market Place (Business and Finance Application Market), which is based on cloud, templates, and ecology, and continues to invest resources to build it into the infrastructure for the digital transformation of corporate business and finance to help companies complete business and financial integration management upgrades.

Thanks to its insight into industry needs and solid technical foundation, FONE has a leading market share in consumer goods, pharmaceuticals, automobile manufacturing, manufacturing and other industries, and has achieved super-fast growth in the past two years. From 2019 to 2020, FONE's revenue growth rate was nearly 300%. At present, FONE has established cooperative relationships with well-known accounting, auditing and consulting institutions such as Ernst & Young, PWC, Deloitte, KPMG, and Hande, and has completed the initial layout of ecological partners. At the same time, FONE's comprehensive budget management solution has been successfully implemented in many companies such as Master Kong, Swire Coca-Cola, GSK, Hengrui Medicine, Daiichi Sankyo, Ping An Bank, Great Wall Motors, and SAIC Passenger Vehicles, providing support for the business decisions of more than 100 companies.

The report also gives its own insights into where EPM business-finance integration will go in the future. EPM data systems will move towards lightweight and middle-end, and through independent plug-in components combined with IT systems, the entire system can be quickly implemented. Cloud native, data system construction, big data, AI, and GPU will become important supporting technologies. The degree of application of these technologies in EPM determines the user experience of EPM products.

With the advancement of technology and the improvement of customer awareness, EPM business-finance integration will gradually show a trend of broadening scenarios, increasing demands, and improving the SaaS level of products. It will become very common to precipitate current business experience into reusable templates and efficiently apply them to more industry scenarios. Secondly, EPM products will also be further improved in terms of general functions and applicability. Finally, the establishment of an ecosystem will enable manufacturers to further deepen their understanding of the business, thereby achieving an improvement in the SaaS level of products.